Al Tayyar Travel Group’s move to launch a real estate investment trust (REIT) is aimed at converting some of its projects that have already started operations to current assets, chief executive Abdullah Al Dawood told CNBC Arabia on Monday.
Through the new vehicle, the travel group will also reinvest some of its funds, which were injected in these projects, in new assets and future expansions.
Al Tayyar will retain a majority stake in the REIT and will continue managing and operating its assets, Al Dawood added.
The company’s hotel investments in Makkah have exceeded SAR 4 billion, part of which will be included in the new REIT, he said, adding that the size of these investments will be disclosed within the next few months.
Al Tayyar is planning expansions in the hotel sector and aims to generate high yields compared to the market average through integrating its hotel, travel and tourism activities.
The Tadawul-listed group announced on Sunday inking a memorandum of understanding with Alistithmar for Financial Securities and Brokerage Co. to set up a new REIT.
The new fund will offer four hotels in Makkah, including Sheraton hotel units and the Ajyad Al Masafi building.
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